Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (10) TMI 102 - AT - Income TaxNature of income - capital gain or income from other sources - nature of possession in the property - assessee HUF has claimed that it has got capital rights in the shape of tenancy rights in the premises in question and that it has got the consideration of ₹ 50 lakhs for surrender of those tenancy rights and hence the income in the hands of the assessee was in the nature of capital gains - Held that:- As put a specific query to the Ld. A.R. whether there was any evidence to show that the assessee was inducted as a tenant in the premises but the Ld. A.R. could not show us any such evidences. Further, a query was raised whether the assessee had ever paid any rent to M/s. Carlton Coats Pvt. Ltd. but the Ld. A.R. has been fair enough to admit that there was no evidence of any payment of rent by the assessee to M/s. Carlton Coats Pvt. Ltd. The Ld. A.R. has also failed to explain as to what was the nature of the rights of the assessee in the property in question. He simply has stated that the same was occupancy rights. However, there is no evidence on the file as to under what circumstances and under what right or contract the assessee has come into possession of the property in question. It is pertinent to note here that the karta of the assessee HUF namely Mr. Amol C. Shah is also the director of the payer company M/s. Carlton Coats Pvt. Ltd. along with another director Mr. Milind C. Shah. The entire stress of the assessee has been on the copy of memorandum of understanding vide which the company has agreed to pay ₹ 50 lakhs to Mr. Amol C. Shah (HUF) wherein it has been mentioned that the said Mr. Amol C. Shah (HUF) claims share right title and interest on certain portions of the said property. It has also been mentioned that the assessee HUF is in the possession of the property in question since the original purchase of the property by M/s. Carlton Coats Pvt. Ltd. There is nothing mentioned in the copy of the agreement that what was the nature of possession in the property in question of the assessee HUF and how or under what rights the assessee HUF come into the possession of the property. We have perused the copies of the income tax returns and have found that the assessee had shown certain income from the activity of stacking/cutting/cloning of papers at Apti Khalapur. However, it is not sufficient to prove that the said address is of the property in question at Apti Khalapur. There may be any other property being used by the assessee HUF at Apti Khalapur. In the absence of any evidence to show that the assessee had ever been a tenant in the said property or the nature of rights and possession in the property in question; the assessee at the most can be said to be the licensee in the said property who has to vacate the premises at the will of the licensor. No capital rights under such circumstances can be held to be owned by the assessee in this respect. Even otherwise as observed above, the karta of the assessee HUF is the director of the payer company and under such circumstances the heavy burden is cast upon the assessee to prove that the above transaction is not a sham transaction. The assessee has miserably failed to prove that it was owning any capital rights in the property in question which was purchased by the company. Under such circumstances, we do not find any infirmity in the order of the Ld. CIT(A) in upholding the additions made by the AO.In our view, the amount received by the assessee HUF is not in lieu of surrender of any capital rights but its income from other sources. - Decided against assessee
|